By | 2021-10-29

Large sums of money are often involved in the purchase or sale of a home, or other property. It is important that these funds and any related documents be transferred from one party to the other in a neutral, secure, and knowledgeable manner. The escrow process was created to protect buyer, seller, and lender.

You, as a seller or buyer, want to ensure that all conditions are met before money and property change hands. An escrow is an agreement in which one party involved in the sale, transfer, or lease of personal property or real estate with another person gives money, a written instrument or other valuable items to a neutral third party, known as an escrow agent, or escrow holder. The money or other items are held by this third person until a specific event occurs or a condition is met.

Simply put, the escrow holder acts impartially to carry out written instructions from the principals. After the successful completion and payment of the escrow, the principals will receive the funds and documents they require.

All information required to close the transaction must be given to the escrow. These documents could include loan documents, tax statements and fire and other insurance policies. Title insurance policies can also be included. Terms of sale and seller-assisted financing terms may also be required. Payments for various services must be made out of escrow funds.

If the transaction depends on new financing arrangements, the buyer or buyer’s agent must make these arrangements. Before the property transfer can occur, the documentation of the new loan agreement must first be received by the escrow holder. An agent in real estate can help you find the right lending institution.

Once all instructions have been followed, closing can be completed. All outstanding funds are then collected and fees, such as title insurance premiums or real estate commissions, are paid. The escrow instructions then direct the transfer of title to the property and issue the appropriate title insurance.

Payout of funds should be made in the form that is acceptable to the escrow. Out-of-town or personal checks can delay processing transactions for days.

These are some examples of the things an escrow holder might do and not do.


  • acts as the neutral “stakeholder”, and the communication link between all parties to the transaction
  • Prepares escrow instructions
  • Requests a preliminary title search in order to determine the current condition of the title to the property.
  • If the buyer is going to assume a debt or obligation, he/she must provide a statement from the beneficiary.
  • Conforms to the lender’s requirements as specified in the Escrow Agreement
  • Receives purchase funds from buyer
  • Prepares and secures the deed, or other documents that are related to escrow.
  • Rates taxes, interest and insurance according to your instructions
  • All contingencies and other conditions imposed on an escrow are released
  • Records deeds, and all other documents as required
  • Requests for the issuance of the title policy
  • Closes escrow after all instructions from buyer and seller are followed;
  • Disburse funds according to instructions. This includes charges for title insurance and recording fees as well as real estate commissions, loan payoffs, and charges for title Insurance.
  • Prepares final statements to the parties, accounting for all funds deposited into escrow. These are useful for tax returns preparation.


  • offer legal advice;
  • Negotiate the transaction
  • Offer investment advice.

You can always ask your local title company for more information.

This post was written by Dayana Susterman Dotoli. Dayana is the head real estate agent for the Tiffany House In Ft. Lauderdale Beach. Dayana has assisted over 150 individuals with buying, selling, and leasing at Tiffany House. The Tiffany House Residences is a 12 story tower,  offers 129 residences, including 1, 2 and 3-bedroom condominiums and townhomes, with exclusive, resort-style amenities and views of the Intracoastal Waterway and the Atlantic Ocean.

Leave a Reply

Your email address will not be published. Required fields are marked *